Insurance policy and credit card debt

[gurs24]

Illinois.. My Mom has cancer of the liver. Has 6mos to a year of her life left. She has credit card debits that we know won't be paid off. She has no estate to collect from. Will the credit card companies have a right to take her Life insurance policy (10,000.) to pay them down/off?

 

[justalayman]

Illinois.. My Mom has cancer of the liver. Has 6mos to a year of her life left. She has credit card debits that we know won't be paid off. She has no estate to collect from. Will the credit card companies have a right to take her Life insurance policy (10,000.) to pay them down/off?

Generally life ins policies pass outside of probate. It would go to the beneficiary listed on the policy.

The one thing that comes to mind here is, is this a credit life insurance policy bought from the CC company to cover the debt? or any other similar type policy?

 

[gurs24]

no on the cc company. It is strickly a Life insurance policy from Global Ins. Co. Will we have to do that "probate" thing? She doesn't have any assets or anything of value. Only her monthly Social Security ck. Thanks for the quick reply.

 

[justalayman]

no on the cc company. It is strickly a Life insurance policy from Global Ins. Co. Will we have to do that "probate" thing? She doesn't have any assets or anything of value. Only her monthly Social Security ck. Thanks for the quick reply.

Contact your county probate court as to the requirements for determining if probate needs to be opened. Many have a "mini estate" option for small estates. If there are single owned bank accounts or real property involved, it would need to be done to establish a legal entity to sign for the estate to convey the assets to the heirs or debtors.

From your post, it doesn't sound like there is anything to probate but check with the courts in your area to be sure.

Many probate courts have a good pamphlet available to assist you in your concerns.

 

[gurs24]

Thank you very much. We will check this out.

 

[anteater]

Thank you very much. We will check this out.

There are living Primary and Contingent beneficiaries on the life insurance policy, aren't there?

 

[Betty]

Normally, life insurance proceeds go to the named beneficiary/beneficiaries & are not considered as part of the estate (unless estate was name bene) & do not have to be used to pay creditors/debts. As anteater asked is there a named living bene?